DIGITAL TRENDS YOU NEED TO EMBRACE FOR THE YEAR OF THE DOG
2018’s most successful communicators will be adaptable and constantly curious, ready to experiment, break the rules, and step way outside their organisation’s comfort zone. So, how can you make sure you’re up there with the best?
Before we get to the trends, let’s agree on a few ground rules. It’s a competitive world out there, and your best weapons will be data (lots of it), analytical intelligence, and the automated processes to make the most of it. Digitalisation continues to lower barriers to entry, empower new business models, and shift the value chain, so time-to-market pressures will only get more intense.
With faster time-to-market pressure comes increasing profitability pressure. You need to know, understand, and trust the numbers paid media are telling you — this is something I’m planning to work on much more with clients in the coming year. Your customers will be always on, always social, always expecting a best-in-class experience — and prepared to switch to get it. So arming yourself with memorable social and video marketing, analytics, native ads, programmatic campaigns, in-store mobile offers, content marketing, 1. Social Ecosystems
The Facebook ecosystem continues to dominate social media – and social commerce. In June 2017, Facebook had over 2.01 billion monthly active users worldwide, up 17 percent over June 2016 - and more than half of those users were mobile. As a result, mobile advertising revenue represented close to 90% of all Facebook’s advertising revenue by Q2 2017.
The company is equally dominant as a driver of traffic to news websites. . Traffic from Facebook can make or break news publishers’ social media success, accounting for over 85% of the traffic from social networks. Twitter’s contribution as a primary driver is surprisingly low, given the platform’s emphasis on news, and all other social media channels combined play a marginal role at best. Between them, Facebook and Twitter account for 98% of social media-generated traffic to news websites.
Inside China, the growing strength of the Alibaba and Tencent ecosystems should not be ignored. WeChat, a key element of Tencent’s ecosystem, boasts almost a billion monthly logged-in users and the ecosystem has 3.5 million active official accounts. Alibaba’s Tmall and Taobao together have a billion users, and even back in 2016, the two ecosystems’ payment services processed three trillion transactions. Couple these mind-boggling numbers with the fact that ecosystems in China are much more integrated than in the west – see #8 below for more on eCommerce trends – and you have a serious marketplace to be reckoned with.and other digital techniques will be essential for survival in an ever-more complex marketing landscape.
This year’s Digital Trends has a particularly ‘Asian’ twist because, as of January 2018, I’m now working out of Hong Kong! And this is why this year my new year trends coincide with Chinese New Year. While I’m seeing a number of cross-market commonalities, I’m also noting below some specific and particularly fascinating trends coming from Asia. But regardless of where you are in the world, you need to understand the forces driving your market if you’re going to succeed in 2018. So here’s to another year of massive disruption in social, digital, and mobile communications!
1. Social Ecosystems
The Facebook ecosystem continues to dominate social media — and social commerce in the West. In June 2017, Facebook had over 2.01 billion monthly active users worldwide, up 17 percent over June 2016 — and more than half of those users were mobile. As a result, mobile advertising revenue represented close to 90% of all Facebook’s advertising revenue by Q2 2017.
The company is equally dominant as a driver of traffic to news websites. Traffic from Facebook can make or break news publishers’ social media success, accounting for over 85% of the traffic from social networks and their latest news feed update is causing publishers to look at how they leverage the platform to drive business. Twitter’s contribution as a primary driver is surprisingly low, given the platform’s emphasis on news, and all other social media channels combined play a marginal role at best. Between them, Facebook and Twitter account for 98% of social media-generated traffic to news websites.
Inside China, the growing strength of the Alibaba and Tencent ecosystems should not be ignored. WeChat, a key element of Tencent’s ecosystem, boasts almost a billion monthly logged-in users and the ecosystem has 3.5 million active official accounts. Alibaba’s Tmall and Taobao together have a billion users, and even back in 2016, the two ecosystems’ payment services processed three trillion transactions. Couple these mind-boggling numbers with the fact that ecosystems in China are much more integrated than in the west — see #8 below for more on eCommerce trends — and you have a serious marketplace to be reckoned with.
2. Voice-powered Search
The voice interface has really come into its own this year because it’s clearly faster and more efficient to speak than type. Voice search traffic now exceeds 10% of all search traffic, according to Mind Source, and interestingly is more likely to focus on local searches — the ever-growing demand for instant gratification seems likely to be a driver here.
Virtual assistants respond to 50 billion voice searches every month, and Amazon Echo is currently the fastest-selling Bluetooth technology of all time. By 2020, over 200 billion searches will be voice-driven. Google Home is the most accurate of all the virtual assistants but expect to see fierce competition from Apple’s Homepod when it ships this spring.
In Asia, Baidu, Alibaba, and Tencent (BAT) are catching up fast. Alibaba’s Tmall Genie is very similar to Alexa and also offers smart home controls. In a parallel development, because the hardware can be produced cheaply, expect to see special-purpose smart assistants pre-loaded with thousands of, for example, recipes hit the market. Businesses that could benefit from this type of niche marketing should keep an eye on developments in this area.
For a really interesting use of Amazon Echo in marketing communication, check out Just Eat. When Alexa first appeared, take-out food shoppers were pretty much limited to ordering a Domino’s pizza, but by partnering with Just Eat, more than 27,000 food sellers are now as close as Alexa. Just tell her what you want and she does the legwork, finding the outlets with the best reputation and placing your order.
3. Visual Search
Two months after letting shoppers search its outfits using photos instead of keywords, fashion retailer Asos was sold on visual search as an effective conversion tool. Expect this trend to accelerate quickly in China, where facial recognition technology is forging ahead rapidly. Both publishers and advertisers have shown great interest in visual search’s ability to connect the offline and online content of brands as well as m-commerce capabilities.
For example, with iQNECT’s ‘point-snap-pay’ feature, consumers can be brought instantly from the advertisements of products they are interested in to virtual checkout counters to buy said items.
These publishers include Malaysia-based organisation Blu Inc., which owns magazines such as Cosmopolitan, Harper’s Bazaar, Marie Claire and others in the country.
Online fashion destination Zalora Group has launched a visual search feature on its Android and iOS mobile apps.
By clicking the search button, users can take a photo of their favourite clothing item or accessory and instantly see similar products available on the online fashion destination. It is a result of a partnership with artificial-intelligence company ViSenze, which specialises in visual commerce.
More than 20 million customers across Asia have downloaded the Zalora app, and to date more than half of the company’s orders come from mobile devices.
4. Predictive Connections
With an estimated two billion users receiving messages through over-the-top (OTT) apps by 2018, social messaging is likely to be embedded in every online interaction. It’s anticipated that 75% of developer teams will include AI and other self-learning functionality in at least one app or service, something WeChat and Alibaba have offered for some time through mini apps on WeChat. Look for this technology to start moving into predictive suggestions based on user data in 2018. Chatbots have seen a significant adoption increase by brands. According to Gartner, 85 percent of all customer service interactions will be powered by AI bots by 2020. In 2017 beauty brand Shiseido launched a virtual skincare consultant on Facebook Messenger, which provides product descriptions, asks users about their skin concerns, and makes recommendations. According to Sandy Low, regional digital and CRM Director, Shiseido Asia Pacific, Shiseido needed a new way to engage and personalise the brand experience for its customers. As such, the company has been working closely with its in-store Shiseido beauty consultants by collecting customer insights and using these data to recreate the in-store experience online. In December 2017, the chatbot is poised for another update which will incorporate customer relationship management, sampling and redemptions.
H&M’s Kik chatbot became a personal stylist for shoppers by giving outfit recommendations last year and in September, Citibank launched Citi Bot in Singapore — also on Messenger — to answer account queries and frequently asked questions, with plans to roll the chatbot out across Asia Pacific.
5. Micro-moments
Mobile ad spending itself is a $100 billion industry, and it is expected to outspend TV ad spending as soon as 2020. Globally, the biggest ad spend by 2019 is expected to come from Asia Pacific, a region that’s also leading the charge in mobile marketing with the fastest growing population of smartphone users in the world. The average mobile user owns six devices, uses them three times a day, and opens their phone 200 times a day to read emails, go shopping online, or check social media feeds. Every time they do this, they are bombarded with push marketing that they long ago stopped paying any attention to. It’s our job as communications professionals to blend science and magic to bring back the relevancy of brands in today’s hyperconnected world. This is where ‘micro-moments’ come in — context-sensitive messages delivered at the precise time when a user turns to a device to answer a question or decide where to go, what to do, or what to buy.
96% of users reach for their smartphones to conduct research on the spot. The most successful brands will be those that anticipate and address those impulses with micro-moments that deliver the right information at the right time to that user.
For this kind of just-in-time communication to work, marketers need to fully understand what motivates their target audience in multiple circumstances and then experiment with targeted communications based on user information, like the search terms they’re using or their recent browsing activities. Armed with that data, marketers can deliver an interactive experience that offers individually relevant value — deals, discounts, insight, experiences, and more. They’re the ideal tool for mobile-first websites.
6. Geofencing and location relevance
For many, mobile devices are becoming extensions of their bodies. Wherever they go, their devices go. Users trigger on average 75 separate mobile sessions every day, so they’re engaging with the devices throughout their day across multiple locations.
Marketers can collect information about and target their customers as they enter, leave or stay in specific areas, known as geofences, which prompt mobile notifications when a customer is active in those areas. During those key moments, marketers have the opportunity to engage with users by sending contextually relevant promotional messages. Bear in mind, however, that while Western customers have to be persuaded to ‘allow’ your app to track their location, Chinese ecosystems have already moved into the predictive phase, pre-establishing a relationship of trust between the user and the benefits offered.
7. Video Everywhere
We have movie shorts on Facebook, vertical video ad units on Snapchat and Instagram, TV apps and more. Be it silent, portrait, six-second, or anything else you can think of, video is everywhere. eMarketer Expects Digital Video Viewership in Asia-Pacific to Increase by 10.3% This year China will have 569.0 million digital video viewers in 2017.
Publishers struggling with the slow demise of banner advertising are chasing after the lure of video ad budgets. While good video can be created cheaply, many are focusing on high production values that are not delivering on growth expectations. Expect to see TV-style shows become part of the social video mix as platforms chase mid-roll ad dollars through programming with a longer narrative arc than your average cat video. While I don’t expect Facebook, Twitter or Snapchat to become the next Netflix, I do expect to see them compete more and more with YouTube, which has also tried to carve a niche in the mid-length content space.
eMarketer estimates that more than half the US population will use connected TVs at least once a month in 2018, but connected TV advertising hasn’t caught up yet. There have been issues of scale, as well as other business and logistical hurdles, none of which will be entirely overcome in the next year. But I do expect to see steps in that direction, driven by the connected TV sitting at the intersection between traditional television and digital video — two of the most robust and enduring advertising channels. Two major over-the-top (OTT) TV services, YouTube TV and Hulu with Live TV, will join established players like Sling TV, DirecTV Now, and PlayStation Vue in digitally delivering TV bundles marketed as lower-cost alternatives to traditional pay TV. Aggressive competition will accelerate TV cord-cutting, particularly among millennials, as more devices support more delivery platforms.
In China, video-on-demand (VOD) services are making headway, including iQiyi, an on-demand video streaming service that reported $1.5 billion in revenues for 2016 from video subscriptions, advertising and other sources. YouTube, Facebook and other social platforms command the lion’s share of consumer attention, and hence ad dollars, but some interesting opportunities may arise soon with auto-generated video from companies like Wibbitz.
8. eCommerce — the ultimate disruptor?
Mega ecommerce sites like Amazon and Alibaba are fast becoming self-contained destinations, far outpacing Google and Baidu in shopping-related searches. Content consumed on ecommerce sites converts in situ to sales. Two parallel trends are developing here:
· Using machine learning to generate customized online banner ads. Alibaba’s AI-based marketing design platform has generated more than 400 million personalized ads for merchants at a rate of 300,000 a minute
· Medium- and long form multi-platform content development. Amazon spent $4.5 billion on video content development in 2017, double what it spent in 2016. Jeff Bezos’ personal commitment to the “content is kind” mantra was further underscored by his purchase of The Washington Post. Expect to see the company reach out to Amazon Prime customers through content packages this year.
Amazon derives much of its power from facilitating and replicating the activities of its partners, in retail and fashion in particular — decimating margins and delivery models. Its recent and widely derided move into luxury goods is likely to continue the same pattern. Morgan Stanley analyst Brian Nowak estimates that Amazon’s advertising business will reach $7 billion in revenue by 2020, buoyed by increasing use by brands of Amazon’s own advertising platform. Let’s also not forget that advertising has a profit margin of 20–30 percent versus the 5 percent that is common for retail, according to analyst Steven Mallas..
This intersection between advertising and ecommerce is an increasingly important aspect of the ecosystems I mentioned in #1 above. Here, there’s a significant difference between China and the West. In the West, digital ecosystems are very open and rely on marketing activities to drive traffic, whereas in China, sales conversion is baked in from the outset. Ecosystem planning is an essential part of the planning process in China, and it’s becoming apparent that Android is moving toward a more closed, Apple-style approach, so marketers in both camps need to keep a weather eye on who’s playing nice with whom and invest accordingly.
9. Augmented reality is the new reality
AR is now baked into the apps on your smartphone. There’s Google Pixel’s AR stickers, AR support embedded into the latest iOS, and Facebook’s imminent launch of an AR developer kit. In Asia, Alibaba has integrated AR into Alipay, and can WeChat be far behind? We are seeing brands like In the lead up to the launch of the Justice League film, augmented reality allowed users to “mask up” as their favourite super heroes through Facebook’s Messenger platform;
While Snap is charging media agencies a cool million for an AR lens, it makes more sense at this stage in the game to simply create a bitmoji for a brand character or piggyback on Facebook or Google activities already in process. Get ready, but don’t make the big jump yet.
10. Personalised Content At The Speed Of Mobile
In many ways, personalized content has come full circle. When once we walked press releases into newspaper offices and placed them in the hands of reporters, we now use smart technology to target individual influencers in multiple communications — but the content is just as personalized as those hand deliveries. What’s key now is to ensure those influencers are contextually correct for the content being delivered — something that became all too clear with the recent major faux pas by influential vloggers PewDiePie and Paul Logan. Contextually accurate and appropriate targeting is now a core competency for communications professionals.
Smart Insights tells us that 61% of customers place more trust in, and are more likely to make repeat purchases from, companies that deliver personalized content. Recode reports that mobile video ad spend will grow 49% to roughly $18 billion in 2018, while non-mobile video ad spend is expected to fall 1.5% to $15 billion. In China, WeChat launched a “mini-apps” system that’s been a game-changer in the app store space. Mini apps can only be accessed within the WeChat main app, but users don’t need to download, install, and set up an account in order to use them. It’s a one-stop app shop that has everything.
Facebook’s Kat Hahn has calculated that we scroll through 300 feet of content every day. Here’s how she believes brands need to craft their communications to stand out in this instant-everything world:
· 70% ‘on-the-go’ — short and snappy content that consumers will view and like immediately but not be too invested in
· 20% ‘lean forward’ — interactive content that catches the attention of consumers looking for something to watch
· 10% ‘lean forward’ — immersive content that goes into more detail for consumers willing to watch something for a sustained period of time
The Future is Now
Digital marketing is barreling forward at blinding speed. This is no time to rely on what’s worked in the past — you need to engage with the future today, and I can show you how.
Check out my blog for more on social commerce and the death of push marketing, or get in touch on Twitter @emalinaker or via LinkedIn.
